Macbook - Running programs off of an external hard-drive..

Ok...so I am completely out of space on my hard-drive. And instead of just upgrading my internal hard-drive, is there a way I could combine the uses of an internal hard-drive with buying an external hard-drive? My ultimate goal in this would be to run programs off of my external hard-drive, if i were to buy one.

When I started getting low on space on my (non-portable) Mac I moved some of the bigger apps, such as Unreal Tournament (5 gig) Adobe Creative Suite (a couple gig there) to an external 250gig firewire drive. I just created a folder on it that I called 'Applications2' and dragged them there. The Creative Suite has individual folders for each application so I just dragged those folders, while UT was just one app which I dragged over to the external. All worked fine.

Now that I have a Macbook my external drive isn't always with me, so while I could do similarly, I wouldn't have those apps with me wherever I go, which is kind of the point of having a portable Mac and I'm not about to pack up the enclosure to take with me everywhere.

But yeah, it's pretty straightforward to move and run apps from an external drive.